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Bernanke: A Tenure of Failure: An Addendum

July 31, 2013
President Obama recently commented that he wanted a next Fed chairman who would do good for all not just for Wall Street and the rich [and politicians and chrony capitalists  supporting government spending at unsustainably high levels), but for everyone. Perhaps if what he has in mind is a real “helicopter Ben” who, instead of buying $85 billion in securities a month from financial institutions, would drop $85 billion from helicopters at pre-announced locations, the common folk might feel an illusion of increased prosperity in the very short run. If he is truly serious about a first do no harm monetary framework, he would work with closely Ron Paul not just to audit the Fed, but to dismantle it. Robery Murphy’s archive and Mark Thornton’s archive are highly recommended. More criticisms of Bernanke’s post 2008 policy from Austrian sympathizers and non-Austrian sources: From yesterday’s Wall Street Journal Ronald I. McKinnon makes a similar point to Salerno’s argument that a low interest rate environment impedes recovery. In  “The Near-Zero Interest Rate Trap”, McKinnon summarizes nicely, “By trying to stimulate aggregate demand and reduce unemployment, central banks have pushed interest rates down too much and inadvertently distorted the financial system [and real structure of production] in a way that constrains both short- and long –term business investment. The misnamed monetary stimuli are actually holding the economy back.” Steven H. Hanke also has some relevant commentary on how current policy has retarded rather than stimulated recovery. See: The Federal Reserve vs. Small Business Rethinking Conventional Wisdom: A Monetary Tour d'Horizon for 2013 Especially section 3: Rethinking the Fed’s Monetary “Stimulus” Here is a sample of John B. Taylor’s commentary: ← Older posts Same Old Slow Recovery Posted on February 4, 2013by John Taylor The data released last week generated a lot of news stories, first bad ones about the GDP numbers and then good ones about the employment numbers. When you put the numbers in perspective, however, the economic story is little changed from … Continue reading → Posted in Slow Recovery Don’t Blame Weak Recovery on State and Local Spending Cuts Posted on June 15, 2013by John Taylor As the economic recovery has remained weak well into its fourth year, some Washington policy makers have increasingly been blaming cuts in government spending, with much of their finger pointing at state and local governments where purchases of goods and … Continue reading → Posted in Slow Recovery Ed Leamer on the Weak Recovery Posted on June 3, 2013by John Taylor In a recent “chart cast” video posted on YouTube, Russ Roberts interviewed Ed Leamer of UCLA on why the recent economic recovery has been so weak. Ed’s list of causes differs a lot from mine, which Russ discussed with me … Continue reading → Posted in Slow Recovery An Unusually Weak Recovery as Usually Defined Posted on October 26, 2012by John Taylor The view that the current U.S. recovery is unusually weak compared to past U.S. recoveries from recessions with financial crises is gaining more and more support. Economists David Papell and Ruxandra Prodan in an article posted on Jim Hamilton and … Continue reading → Posted in Slow Recovery Weak Recovery Denial Posted on October 18, 2012by John Taylor Paul Krugman disagrees with my recent post that the recovery is weak compared to recoveries from past serious U.S. recessions including those associated with financial crises. I’ve been writing about the reasons for weak recovery for two years, but the … Continue reading → Posted in Slow Recovery More on the Unusually Weak Recovery Posted on October 15, 2012by John Taylor The weak recovery continues to be a major topic. Over the weekend, Russ Roberts issued the second episode of his three part “chartcast” series on the topic, which is based on interviews with me and builds on his highly-regarded podcast series, … Continue reading → Posted in Slow Recovery|Leave a comment A New Chart Cast on the Bad News Recovery Posted on September 8, 2012by John Taylor As many have observed the employment report for August released today was disappointing news, but it really is a continuation of a steady stream of bad employment news that has been the story of this recovery since its beginning. The … Continue reading → Posted in Slow Recovery It’s Still a Recovery in Name Only–A Real Tragedy Posted on August 4, 2012by John Taylor I have been regularly charting the path of real GDP and employment during the recovery from the recession as new data are released. From the start it was clear that the recovery was very weak. By its second anniversary the … Continue reading → Posted in Slow Recovery Policy Uncertainty Makes Firms Reluctant to Hire: New Evidence Posted on July 31, 2013by John Taylor I have been arguing that economic policy–in particular policy unpredictability or uncertainty–has been a factor in the slow recovery. That’s the main theme of the book I edited with Lee Ohanian and Ian Wright. A chapter by Scott Baker, Nick … Continue reading → Posted in Uncategorized More on Monetary Policy Before and After the Panic of 2008 Posted on June 28, 2013by John Taylor Many agree that the provision of liquidity by the Fed during the panic period in the fall of 2008 was helpful in alleviating severe stress in the markets and rebuilding confidence. Most criticism of the Fed pertains to the period … Continue reading

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